Brno blocks investment by e-commerce giant Amazon

Plans for US-based e-commerce giant Amazon to build a second distribution
centre on the outskirts of the Czech Republic’s second city, Brno, appear
to have been thwarted. Other Czech sites are also being offered while
Slovakia is also trying to land the investment and the estimated 2000 jobs
going with it.

Roman Onderka (right), photo: CTK
Brno mayor Roman Onderka has admitted that plans for a second Czech Amazon
distribution centre in Brno are as good as dead after the expected majority
of councillors in favour failed to materialize. Votes in favour of the
Amazon investment fell three short of the required 28 to push the project
through.

The biggest last minute hitch at the council meeting appears to have been
the fact that changes in the land use plans for the massive logistics
centre, the size of 13 football pitches, have not been agreed.

Some councillors were worried that failure to make that change could have
left the city open to expensive arbitration proceedings from Amazon and the
development company representing it if everything went pear shaped later
on. Offers from developer CTP Invest to give guarantees that no such
proceedings would be launched were not sufficient to overcome those
concerns.

Mayor Onderka, one of the biggest supporters of the Amazon investment,
told public service broadcaster Czech Television later that he would try
and get the land use change problem ironed out at the following council
meeting in April, or perhaps, May, but it was up to Amazon in the last
resort if it wanted to delay its plans until then.

Time has been of the essence to the e-commerce giant, which wants to get
the new centre up and running before the Christmas rush of orders.
Ironically, what appeared to be far bigger initial problems were overcome a
few weeks ago to get a similar Amazon investment confirmed on the outskirts
of Prague.

In a statement released after Tuesday’s vote, Onderka said that he
respected the result of the vote but did not agree with it. ‘At a time of
economic recession, Brno has missed the chance to get a strong investor and
at the same time has sent a negative signal to other potential
investors,’ he added.

Illustrative photo: CTK
There are around 23,000 people in Brno registered as unemployed with
Amazon offering the possibility of up to 2,000 new jobs as well as millions
invested in transport links to the industrial zone earmarked for the
centre, Onderka said.
Arguments that many of the jobs amounted to modern day slavery or that a
gun was being held at the council’s head in last minute negotiations were
not true, he added.

As well as being a slap in the face for the mayor, with six of his fellow
Social Democrat party members failing to vote in favour, the council vote
is also a rebuff for Social Democrat, Prime Minister Bohuslav Sobotka and
Minister of Industry and Trade, Jan Mládek, who both strongly backed the
investment.

The ball now appears to be firmly back in Amazon’s court. While other
Czech locations will be offered for the 2.7 billion crown distribution
centre, which should serve not just the Czech Republic but the whole of
Central Europe, including Austria, Slovakia is keen to get in on the act.
The Slovak daily SME reported Wednesday that the west Slovak town of
Malacky and the capital Bratislava are both in talks over the Amazon
project with a spokesman for the Ministry of Economy suggesting that
investment incentives could be mobilized to land the US investment.